List of Contents and Tables

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2 List of Contents and Tables COUGH, COLD AND ALLERGY (HAY FEVER) REMEDIES IN SWEDEN - CATEGORY ANALYSIS... 1 Headlines... 1 Trends... 1 Switches... 2 Competitive Landscape... 2 Prospects... 3 Category Data... 3 Table 1 Sales of Cough, Cold and Allergy (Hay Fever) Remedies by Category: Value Table 2 Sales of Cough, Cold and Allergy (Hay Fever) Remedies by Category: % Value Growth Table 3 Sales of Decongestants by Category: Value Table 4 Sales of Decongestants by Category: % Value Growth Table 5 Sales of Child-specific Cough, Cold and Allergy (Hay Fever) Remedies by Category: Value Table 6 Sales of Child-specific Cough, Cold and Allergy (Hay Fever) Remedies by Category: % Value Growth Table 7 Cough, Cold and Allergy (Hay Fever) Remedies Company Shares by Value Table 8 Cough, Cold and Allergy (Hay Fever) Remedies Brand Shares by Value Table 9 Forecast Sales of Cough, Cold and Allergy (Hay Fever) Remedies by Category: Value Table 10 Forecast Sales of Cough, Cold and Allergy (Hay Fever) Remedies by Category: % Value Growth COUGH, COLD AND ALLERGY (HAY FEVER) REMEDIES IN SWEDEN - COMPANY PROFILES... 8 Friggs Ab in Consumer Health (sweden)... 8 Strategic Direction... 8 Key Facts... 8 Summary 1 Friggs AB: Key Facts... 8 Summary 2 Friggs AB: Operational Indicators... 8 Company Background... 8 Production... 9 Summary 3 Friggs AB: Production Statistics Competitive Positioning... 9 Summary 4 Friggs AB: Competitive Position CONSUMER HEALTH IN SWEDEN - INDUSTRY OVERVIEW Executive Summary Resilience To Wider Economic Forces Liberalisation Boosts Sales Growth... 11

3 Increasing Concentrated Environment Distribution Increasingly Diverse Positive Outlook Key Trends and Developments the Population Continues To Age Consumer Healthcare Proves Resilient To Wider Economic Forces Health and Wellness A Driver of Sales Swedish Consumers Are More Willing To Self-medicate Liberalisation Does Not Lead To Increased Price Competition Market Indicators Table 11 Consumer Expenditure on Health Goods and Medical Services Table 12 Life Expectancy at Birth Market Data Table 13 Sales of Consumer Health by Category: Value Table 14 Sales of Consumer Health by Category: % Value Growth Table 15 Consumer Health Company Shares by Value Table 16 Consumer Health Brand Shares by Value Table 17 Penetration of Private Label by Category Table 18 Sales of Consumer Health by Distribution Format: % Analysis Table 19 Sales of Consumer Health by Category and Distribution Format: % Analysis Table 20 Forecast Sales of Consumer Health by Category: Value Table 21 Forecast Sales of Consumer Health by Category: % Value Growth Appendix OTC Registration and Classification Advertising Standardised Packaging Requirements Vitamins and Dietary Supplements Registration and Classification Advertising Self-medication/self-care and Preventative Medicine Switches Summary 5 OTC Healthcare Switches Definitions Summary 6 Research Sources... 27

4 COUGH, COLD AND ALLERGY (HAY FEVER) REMEDIES IN SWEDEN - CATEGORY ANALYSIS HEADLINES Current value sales reach SEK1.5 billion in 2010, an increase of 4% The de-regulation of pharmacy sales in November 2009 has a positive impact on 2010 sales developments Child-specific cough/cold remedies records the fastest retail value growth in 2010 at 21% Novartis Sverige AB is the leading player in 2010 with current value share of 18% Sales are expected to increase in constant value terms by 14% overall to reach SEK1.7 billion in 2015 TRENDS The de-regulation of pharmacy sales in November 2009 had a positive impact on 2010 sales developments. De-regulation led to an increase in product availability and distribution as grocery retailers are now permitted to carry and sell certain cough, cold and allergy remedies previously restricted to the chemists/pharmacies. Nasal sprays in particular benefitted from de-regulation, recording retail value growth of 11% for In current value terms, 2010 s growth was slower than the 6% CAGR recorded for the review period. Deregulation, while strongly boosting the sales of nasal spray, did not have the same level of impact on sales of other cough, cold, allergy remedies. Child-specific cough/cold remedies recorded the fastest current value growth in 2010 at 21%, albeit from a low base value. Child-specific cough/cold remedies is in its infancy stage of development. The strong 2010 growth rate is a reflection of this. Despite the de-regulation of pharmacy sales, this did not have any real or significant influence on pricing developments in Price discounts and/or promotions in 2010 were primarily restricted to medicated confectionary sales. This is because the sale of medicated confectionary is significantly less regulated than is the case for other cough, cold and allergy remedies. Child-specific products remain underdeveloped in the country. The only child-specific products present are all cough remedies. This is because the overriding majority of products available offer dosage recommendations for both adults and children. The existence of these dosage recommendations is stifling the development of child-specific sales as there is no clear and defining reason for consumers to purchase these products. 42% share of value sales stems from herbal/traditional products, with medicated confectionary representing 84% of total herbal/traditional product sales. This includes popular brands such as Vicks and Fisherman s Friend. Combination product Kan Jang from Green Medicine AB is one of the most popular preparations against coughs and colds, and this brand has been popular for many years. Kan Jang is a combination of Arctic root, Echinacea and Malabar nut. Nasal Sprays is by far the most popular decongestant by product type in Sweden, holding 91% share of total decongestant retail value sales in According to research undertaken by Läkemedelsverket in 2008, about a third of the adult population has problems with hay fever or allergies against animals. These problems include runny eyes and nose, as well as asthma. During the second half of the 20th century, allergy problems increased rapidly, while the review period witnessed a much slower increase. Hay fever is the most common type of allergy. In November 2009, the Swedish health authorities started a mass campaign of free vaccinations against the N1H1 influenza. All citizens were allowed to have the vaccination free of charge. The impact on sales of

5 cough, cold and allergy remedies was limited, as the usual outbreaks of coughs and colds take place during the autumn and winter. There are no widespread herbal/traditional home-made remedies which compete strongly with standard medical products. Positioning, recommendation and tradition are key drivers of the purchasing decision making process. There were no UTC sales in this category in SWITCHES The nasal spray Desonix 0.32mg from Sandoz AB was switched to OTC status to The switch had limited impact on total category sales as its distribution is restricted to the pharmacy channel. Desonix s sales are very marginal in the total context of category sales, less than 1% of cough, cold and allergy (hay fever) remedies total value for COMPETITIVE LANDSCAPE Novartis Sverige AB was the leading category player with a 2010 retail value share of 18%. Novartis Sverige AB is the national brand owner of a number of popular cough, cold, allergy remedies brands such as Otrivin and Strespils. Consumer recognition and loyalty to these brands supports and strengthens the company s value share. y

6 PROSPECTS De-regulation of consumer health will continue to have a positive influence over forecasts, especially nasal sprays. CATEGORY DATA Table 1 Sales of Cough, Cold and Allergy (Hay Fever) Remedies by Category: Value SEK million Antihistamines/Allergy Remedies (Systemic) Child-Specific Cough, Cold and Allergy Remedies Combination Products - Cough, Cold and Allergy (Hay Fever) Remedies Cough Remedies Decongestants Medicated Confectionery Pharyngeal Preparations Cough, Cold and Allergy (Hay Fever) Remedies Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

7 Table 2 Sales of Cough, Cold and Allergy (Hay Fever) Remedies by Category: % Value Growth % current value growth 2009/ CAGR 2005/10 TOTAL Antihistamines/Allergy Remedies (Systemic) Child-Specific Cough, Cold and Allergy Remedies Combination Products - Cough, Cold and Allergy (Hay Fever) Remedies Cough Remedies Decongestants Medicated Confectionery Pharyngeal Preparations Cough, Cold and Allergy (Hay Fever) Remedies Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Table 3 Sales of Decongestants by Category: Value SEK million Nasal Sprays Oral Decongestants Inhalant Decongestants Decongestant Rubs Nasal Decongestant Drops Nasal Decongestant Plasters Decongestants Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Table 4 Sales of Decongestants by Category: % Value Growth % current value growth 2009/ CAGR 2005/10 TOTAL Nasal Sprays Oral Decongestants Inhalant Decongestants Decongestant Rubs Nasal Decongestant Drops Nasal Decongestant Plasters Decongestants Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Table 5 SEK million Sales of Child-specific Cough, Cold and Allergy (Hay Fever) Remedies by Category: Value Child-Specific Allergy Remedies Child-Specific Cough/Cold Remedies

8 Child-Specific Cough, Cold and Allergy Remedies Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Table 6 Sales of Child-specific Cough, Cold and Allergy (Hay Fever) Remedies by Category: % Value Growth % current value growth 2009/ CAGR 2008/10 TOTAL Child-Specific Allergy Remedies Child-Specific Cough/Cold Remedies Child-Specific Cough, Cold and Allergy Remedies Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Table 7 Cough, Cold and Allergy (Hay Fever) Remedies Company Shares by Value % retail value rsp Company Others Total Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Table 8 Cough, Cold and Allergy (Hay Fever) Remedies Brand Shares by Value

9 % retail value rsp Brand Company Total Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Table 9 SEK million Forecast Sales of Cough, Cold and Allergy (Hay Fever) Remedies by Category: Value Antihistamines/Allergy Remedies (Systemic) Child-Specific Cough, Cold and Allergy Remedies Combination Products - Cough, Cold and Allergy (Hay Fever) Remedies Cough Remedies Decongestants Medicated Confectionery Pharyngeal Preparations Cough, Cold and Allergy (Hay Fever) Remedies

10 Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Table 10 Forecast Sales of Cough, Cold and Allergy (Hay Fever) Remedies by Category: % Value Growth % constant value growth CAGR 2010/15 TOTAL Antihistamines/Allergy Remedies (Systemic) Child-Specific Cough, Cold and Allergy Remedies Combination Products - Cough, Cold and Allergy (Hay Fever) Remedies Cough Remedies Decongestants Medicated Confectionery Pharyngeal Preparations Cough, Cold and Allergy (Hay Fever) Remedies Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

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14 CONSUMER HEALTH IN SWEDEN - INDUSTRY OVERVIEW EXECUTIVE SUMMARY Resilience To Wider Economic Forces Despite the weak economic climate, Swedish consumer health sales proved to be relatively immune to wider economic forces. Consumer health posted strong retail value growth once again in 2010, albeit slower than the CAGR recorded for the review period as a whole. Most mature consumer health categories proved to be resilient and posted healthy growth rates as consumers still needed to attend to their minor ailments. Growth in 2010 was also supplemented and supported by a number of other factors such as the self-medication trend, liberalisation of pharmacy sales, the continued ageing of the Swedish population and increased category segmentation. Liberalisation Boosts Sales Growth The de-regulation of pharmacy sales occurred in November 2009, leading to the entry of numerous new pharmacy chains. As part of this process the sale of certain OTC medicines was liberalised with distribution via mass market channels such as supermarkets and hypermarkets now possible. This change led to a strong boost in sales prompted by the greater availability and distribution of consumer health products. However, despite the de-regulation of pharmacy sales, subsequent entry of new players in pharmacy retailing sales and product availability in mass market channels, increased or significant price competition had yet to occur in Swedish consumer health at the end of the review period. The lack of price competition in the context of greater product distribution consequently encouraged the recording of strong current retail value growth rates for Increasing Concentrated Environment Consumer health s sales were increasingly characterised by consolidation; numerous categories are dominated by a handful of players. Indeed major players are not just confined to one area of consumer health but have an overall presence across the spectrum of total consumer health sales was also a year that witnessed merger and acquisition activity. The domestic player, Meda AB, firmly stated strategic goals to establish itself as a leading player. This will be achieved through a combination of organic growth and acquisition, as the company s acquisition of BioPhausia OTC medicine product portfolio in September 2010 indicates. Distribution Increasingly Diverse Positive Outlook KEY TRENDS AND DEVELOPMENTS

15 the Population Continues To Age Current Impact Outlook Future Impact Consumer Healthcare Proves Resilient To Wider Economic Forces

16 Current Impact Outlook Future Impact Health and Wellness A Driver of Sales

17 Current Impact Outlook Future Impact Swedish Consumers Are More Willing To Self-medicate

18 Current Impact Outlook Future Impact Liberalisation Does Not Lead To Increased Price Competition

19 Current Impact Outlook Future Impact MARKET INDICATORS Table 1 Consumer Expenditure on Health Goods and Medical Services SEK million Pharmaceuticals,

20 medical appliances/ equipment Outpatient services Hospital services Total Source: Euromonitor International from official statistics, trade associations, trade interviews Table 2 Life Expectancy at Birth years Males Females Source: Euromonitor International from official statistics MARKET DATA Table 3 Sales of Consumer Health by Category: Value SEK million OTC Sports Nutrition Vitamins and Dietary Supplements Weight Management Herbal/Traditional Products Allergy Care Child-Specific Consumer Health Consumer Health,,,,,, Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Note: Sum of sectors is greater than the market size because the four allergy care subsectors are included in allergy care as well as cough, cold and allergy remedies, medicated skin care and eye care. Table 4 Sales of Consumer Health by Category: % Value Growth % current value growth 2009/ CAGR 2005/10 TOTAL OTC Sports Nutrition Vitamins and Dietary Supplements Weight Management Herbal/Traditional Products Allergy Care Child-Specific Consumer Health Consumer Health Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Note: Sum of sectors is greater than the market size because the four allergy care subsectors are included in allergy care as well as cough, cold and allergy remedies, medicated skin care and eye care.

21 Table 5 Consumer Health Company Shares by Value % retail value rsp Company Total Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Table 6 Consumer Health Brand Shares by Value % retail value rsp Brand Company

22 Total Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Table 7 Penetration of Private Label by Category % retail value rsp Consumer Health OTC Sports Nutrition Vitamins and Dietary Supplements Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Table 8 Sales of Consumer Health by Distribution Format: % Analysis % retail value rsp Store-Based Retailing Grocery Retailers Discounters Healthfood shops Hypermarkets Small Grocery Retailers Supermarkets Other Grocery Retailers Non-Grocery Retailers Health and Beauty Retailers Chemists/Pharmacies Parapharmacies/Drugstores Other Healthcare Specialist Retailers

23 Mass Merchandisers Other Non-Grocery Retailers Non-Store Retailing Vending Homeshopping Internet Retailing Direct Selling Total Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Table 9 Sales of Consumer Health by Category and Distribution Format: % Analysis 2010 % retail value rsp OTC SN VDS WM HTP AC Store-Based Retailing Grocery Retailers Discounters Healthfood shops Hypermarkets Small Grocery Retailers Supermarkets Other Grocery Retailers Non-Grocery Retailers Health and Beauty Retailers Chemists/Pharmacies Parapharmacies/Drugstores Other Healthcare Specialist Retailers Mass Merchandisers Other Non-Grocery Retailers Non-Store Retailing Vending Homeshopping Internet Retailing Direct Selling Total CSCH Store-Based Retailing Grocery Retailers Discounters Healthfood shops Hypermarkets Small Grocery Retailers Supermarkets Other Grocery Retailers Non-Grocery Retailers Health and Beauty Retailers Chemists/Pharmacies Parapharmacies/Drugstores Other Healthcare Specialist Retailers Mass Merchandisers Other Non-Grocery Retailers Non-Store Retailing Vending

24 Homeshopping Internet Retailing Direct Selling Total Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Key: OTC = over the counter; SN = sports nutrition; VDS = vitamins and dietary supplements; WM = weight management; HTP = herbal/traditional products; AC = Allergy Care; CSCH = child-specirfic consumer health Table 10 Forecast Sales of Consumer Health by Category: Value SEK million OTC 5 Sports Nutrition Vitamins and Dietary 2 Supplements Weight Management Herbal/Traditional Products Allergy Care Child-Specific Consumer Health Consumer Health 8,,,,,, Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Note: Sum of sectors is greater than the market size because the four allergy care subsectors are included in allergy care as well as cough, cold and allergy remedies, medicated skin care and eye care. Table 11 Forecast Sales of Consumer Health by Category: % Value Growth % constant value growth CAGR 2010/15 TOTAL OTC Sports Nutrition Vitamins and Dietary Supplements Weight Management Herbal/Traditional Products Allergy Care Child-Specific Consumer Health Consumer Health Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Note: Sum of sectors is greater than the market size because the four allergy care subsectors are included in allergy care as well as cough, cold and allergy remedies, medicated skin care and eye care. APPENDIX OTC Registration and Classification

25 European regulatory systems Marketing authorisations

26 Advertising Standardised Packaging Requirements Vitamins and Dietary Supplements Registration and Classification

27 National legislation Distribution Regulation of vitamins and dietary supplements

28 Regulation of herbal products Advertising Self-medication/self-care and Preventative Medicine

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